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Water bosses will be given the power to cut bills for millions of poorer customers, Nick Clegg has announced.
The plan for means testing was revealed in Brazil where the Deputy Prime Minister is at a major environment summit.
According to campaigners, 2.4million households have difficulties paying their bills.
Water bills will be means tested to help 2.4m people who struggle to pay household bills under new plans announced by Nick Clegg
But the Taxpayers' Alliance raised concerns that the 'social tariffs' to help them will have to be mirrored by higher payments for the better off.
At present, companies are restricted by regulator Ofwat from cutting bills for certain customers but the new guidance will free them to do this.
The average water bill in England and Wales is 376, which costs 11 per cent of households more than 5 per cent of their disposable income.
From Rio de Janeiro, Mr Clegg said: 'If you're struggling to make ends meet, not paying for essential utilities isn't an option but it can mean tough choices elsewhere, like sacrificing healthy meals or new school books.'
Deputy Prime Minister Nick Clegg's plan for means testing was revealed in Brazil where he is at a major environment summit
Environment Secretary Caroline Spelman said: 'Many people on low incomes have been struggling to pay their water bills, and these new measures will give them much-needed help.
'Water companies now have the chance to work with their customers to find a solution that works for them, and I hope to see that solution in place as soon as possible.' But Robert Oxley, of the TaxPayers' Alliance, said: 'All families are feeling the pinch, especially those on middle incomes.
'It would be wrong to try to trade bill-payers off against each other.' He urged ministers to scrap policies which he said are driving up bills, not 'tinker with who pays what'.
Water companies are also expected to support vulnerable customers with advice on how to use water more efficiently, guidance on whether a water meter could save them money and referrals to debt and benefits advice.
A spokesman for Downing Street was unable to say if the cost of the social tariffs would be borne by better-off households but added that the Prime Minister wanted to see prices fall.
Anglian Water are rip-off merchants. Our bill is £520 for a small semi-detached house. I don't know where they get this average of £376 per year.
- Smithy, Norwich, 23/6/2012 06:39
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